Sales and Use Tax Annotations

Annotation 280.1140

280.1140 Stock in Trade—Gift of. Merchandise purchased for resale and used instead for the purpose of making a gift is not exempt from use tax. A gift made of inventory stock purchased ex-tax for resale is subject to the use tax since a use was made of the merchandise in California other than retention, demonstration, or display while holding such property for sale in the donor's regular course of business. Although the donor in this state ships the gift to the donee out of state, the making of the gift constitutes a taxable use in this state and the imposition of the use tax does not constitute an unconstitutional burden on interstate commerce. 3/21/67.